in part - PCAOB sanctions the Auditors
By this Order, the Public Company Accounting Oversight Board ("Board" or
"PCAOB") is revoking the registration of Jaspers + Hall, PC and barring its two partners,
Thomas M. Jaspers, CPA and Patrick A. Hall, CPA, from being associated persons of a
registered public accounting firm. The Board is imposing these sanctions on the basis
of its findings concerning respondents' violations of PCAOB rules and auditing
standards in auditing the financial statements of four issuer clients from 2005 to 2007.
I.
The Board deems it necessary and appropriate, for the protection of investors
and to further the public interest in the preparation of informative, fair and independent
audit reports, that disciplinary proceedings be, and hereby are, instituted pursuant to
Section 105(c) of the Sarbanes-Oxley Act of 2002 ("Act") and PCAOB Rule 5200(a)(1)
against Jaspers + Hall, PC ("J+H"), Thomas M. Jaspers, CPA ("Jaspers") and Patrick A.
Hall, CPA ("Hall"), (collectively, "Respondents").
Summary
4. This matter involves numerous and repeated violations of PCAOB auditing
standards by Respondents in the audits of the financial statements of four issuer clients
from 2005 through 2007. As detailed below, during the course of these audits
Respondents consistently failed to perform the most basic functions and procedures
required to evaluate the financial statements of their issuer clients. Among other things,
Respondents failed (1) to perform adequate, or sometimes any, audit procedures in
areas such as cash, deferred revenue, business acquisition accounting, equity, income
taxes, related party transactions, and using the work of specialists; (2) to plan the
audits, prepare audit programs, and prepare audit completion documents; (3) to identify
and appropriately address departures from Generally Accepted Accounting Principles
("GAAP") concerning contingencies; and (4) to retain audit documentation for the
required period of time.
8. J+H and Hall's audit of Force Protection's FY 2006 financial statements
was deficient in several respects. First, they failed to perform sufficient procedures to
verify the existence of approximately $155 million of cash, which represented 57
percent of Force Protection's reported assets. J+H's work papers include copies of
Force Protection bank statements accounting for approximately two-thirds of the
reported cash, but when J+H received no reply to a confirmation request sent to the
bank, J+H and Hall failed to perform alternative procedures to verify that Force
Protection had the cash. They also failed to perform any procedures or obtain any audit
evidence concerning the other one-third of the reported cash.
9. J+H and Hall also failed to perform procedures to evaluate whether
reported deferred revenue, which represented 22.7 percent of Force Protection's total
liabilities, included all appropriate amounts, was appropriately classified as deferred
revenue, and was reported in the appropriate period. J+H and Hall failed to perform
such procedures even though that same failure in an earlier Force Protection audit had
been brought to their attention, as an auditing deficiency, by PCAOB inspectors.
10. In addition, J+H and Hall failed to perform any procedures or gather any
audit evidence concerning a reported deferred tax benefit that represented 67.7 percent
of Force Protection's net earnings, and Hall has acknowledged that he did not
understand the accounting for the deferred tax benefit.8/
public interest in the preparation of informative, fair, and independent audit reports, the
Board determines it appropriate to impose the sanctions agreed to in Respondents'
Offers. Accordingly, it is hereby ORDERED that:
A. Pursuant to Section 105(c)(4)(A) of the Act and PCAOB Rule 5300(a)(1),
the registration of Jaspers + Hall, PC is revoked;
B. After five (5) years from the date of this Order, Jaspers + Hall, PC may
reapply for registration by filing an application pursuant to PCAOB Rule
2101;
C. Pursuant to Section 105(c)(4)(B) of the Act and PCAOB Rule 5300(a)(2),
Thomas M. Jaspers is barred from being an associated person of a
registered public accounting firm, as that term is defined in Section 2(a)(9)
of the Act and PCAOB Rule 1001(p)(1);
25/ AS No. 3, ¶ 6.b.
ORDER
PCAOB Release No. 105-2008-002
October 21, 2008
Page 14
D. After five (5) years from the date of this Order, Jaspers may file a petition,
pursuant to PCAOB Rule 5302(b), for Board consent to associate with a
registered public accounting firm;26/
E. Pursuant to Section 105(c)(4)(B) of the Act and PCAOB Rule 5300(a)(2),
Patrick A. Hall is barred from being an associated person of a registered
public accounting firm, as that term is defined in Section 2(a)(9) of the Act
and PCAOB Rule 1001(p)(1);
F. After five (5) years from the date of this Order, Hall may file a petition,
pursuant to PCAOB Rule 5302(b), for Board consent to associate with a
registered public accounting firm.27/ |
